Tuesday, June 23, 2009

Healthcare

There is a huge debate underway in the halls of Congress over the future of the American Health care system.And despite large majorities in both Houses of Congress, the Democrats are loosing.Sometimes I despair for my party.Though it is clear to me that some form of Single Payer is far and away the best answer for this nation, that is an option that is not even being considered.SighThe battle in Congress is largely over two issues. Including a public option and how to pay the $100 - $160B/year that this program will cost us.Despite several polls showing very widespread public acceptance for a Public Option and a strong majority who are willing to pay more taxes in order to finance this system, some Democrats (including the the Blue Dogs) are blocking a public option. Listening to the debate I hear Republicans (and some Democrats) mouthing the same old tired attacks on a public option.They ask if Americans want a bureaucrat standing between them and their doctors. The sad fact is that for most Americans there already is a bureaucrat standing between them and their doctors. The current bureaucrat works for an Insurance Company and that bureaucrats job is to protect the profits of the Insurance Company. I some how do not see that as any better than a bureaucrat who works for the US Government in the same role. In fact, since the Federal bureaucrat isn't focused on protecting any Insurance Company's profits, they might be more responsive to the needs of the patient and the decisions of the doctors.For years Republicans have stated as if it were a fact that private industry can always do things better than a government entity. Yet now they are publicly worried that many people might leave private insurance for the government run insurance program. Why would they do that if the private insurers could do a better job?? Just look at how well Medicare is managed and what its administrative overhead costs are compared to the inefficiencies and bloated salaries and administrative overhead costs of private insurers. There are some things governments can do well and this looks like it might be one of them.One of the elements of President Obama's proposal is a structure that studies medical methods and outcomes and costs and looks for ways to maximize positive outcomes while reducing costs. Though no one has proposed imposing the results of these studies on anybody, Republicans have twisted this into a government plan to ration care in some way. Its a lie but Republicans do seem to like their lies.One thing that is lost in the current rhetoric is that the current system is financially unsustainable. Its not just that Medicare will grow to consume the entire federal budget, its that private citizens and employers will no longer be able to afford to provide quality care. There is tremendous waste and duplication and conflict of interest in the current system. Administrative overhead consumes about 30% of every health care dollar. (as an aside, overhead in Medicare is far far lower at about 5%). We have well over 1000 insurance companies along with hundreds of thousands of providers of medical services. Yet with all that supposed competition duplication and waste and inefficiency and costs continue to rise far faster than inflation. Without at least a public option, it may not be possible to get control of costs and without getting control of costs the question of who pays the bills is almost meaningless.The current health care system in this country is a national disgrace. We have the best, most advanced, most successful health care in the world, if you can afford it. But we pay way too much for what we get. We pay 20%/person more than the second most expensive country and 50% more than the 3rd most expensive country and yet we have a shorter life expectancy that most industrialized nations, we have higher rates of infant mortality that any other industrialized nation, and we still have 50 million people in this country that do not have any health insurance at all. 62% of all Bankruptcies are partially or completely the result of medical bills and 2/3rds of those medical related bankruptcies involve people WHO HAVE health insurance. No other industrialized nation on earth would tolerate such an outrage.And Republicans (with some Democrats) don't seem to really want to change anything.We are facing a crisis.And it doesn't look like we are going in the right direction.

18 comments:

Anonymous
said...

Exactly right, Walt. Since even before my time (and I'm 62), Americans have bought the Republicans scare tactics about government-managed health insurance. I wonder just how expensive, inefficient and ineffective their health care has to get before they see the light.

I don't really have much to add this one accept to say that medicare is extremely efficient simply because they don't actually pay for the services rendered.

At Sarah's previous job as an outpatient physical therapist they were forced into accepting Medicare and Medicaid patients despite being reimbursed barely 10% of the actual cost of the visit. The resulting policy was that in order for the hospital not to hemorrhage money the staff was 'strongly encouraged' to rush through as many patients as possible and required to do the mandatory paperwork off the clock.

Also, perhaps you might look at the activities of your buddies the trial lawyers for massively escalating liability insurance premiums which get passed on to all of us.

Come to think of it, I wouldn't even want insurance if I could pay a doctor or other highly educated, in-demand medical professional $10 for their valuable time. Maybe we should just demand to pay the same rates as Medicare reimburses and save ourselves the middleman.

Reimbursement rates and administrative overhead are two very different things.Medicare does use its size to help contain costs, though I suspect that it pays far more than 10% of the actual cost of care.As for tort reform, the few studies I have seen indicate that the impact of litigation on medical costs is frequently overstated by those favoring tort reform. I am doing some research and will address this separately in its own post. I am not reflexively opposed to tort reform though the preferred Republican solution of a hard cap on Punative awards is the sort of simplistic sledgehammer approach I would expect and doesn't reflect the reality of many of those cases.

As much as I would like to move to single payer, its a complete non-starter in the current environment so no bill that comes out of Congress will come anywhere close to "turning over the entire medical system to these people."So you are focused on something that can't happen.What is being proposed (well short of single payer) is that people be able to buy into a system like Medicare/VA medical if they chose.If you like your current health care structure - then keep it, nothing changes.But if you are interested in alternatives (competition) then the public option can be one of your options.If you currently have health care through one of the 1000+ health insurance providers and are content to pay them 30% or more in administrave overheads, go ahead.I see no reason that the Public Option should not be just that, an option.Not a mandate.Not "turning over the entire medical system to these people."Just one of your options.And, as a side benefit, this public option could well have the impact of restraining costs throughout the entire health care system and that is good for you and me and really good for our kids no matter who provides your health care.

I love this excerpt from yesterday's Presidental news Conference when he was asked about providing the a publicly run program as an option.

Q: Won't that drive private insurers out of business?

THE PRESIDENT: Why would it drive private insurers out of business? If private insurers say that the marketplace provides the best quality healthcare, if they tell us that they're offering a good deal, then why is it that the government -- which they say can't run anything -- suddenly is going to drive them out of business? That's not logical.

Walt, I'm surprised that you can't see the obvious problem with the optional system you propose. Private insurers are held in check by their responsibility to their shareholders. They MUST run a profitable business.

A government-run program is under no such restraints. There is no check to them charging sub-market premiums and hemorrhaging money. I refer you back to the Medicare point that I made.

If the gov. option can charge massively lower premiums since they reimburse at a criminal rate - using the ever-increasing power of the federal government to massive advantage - then that is absolutely not the market at work. The free market necessarily involves institutions competing under similar circumstances with the best-positioned succeeding and that is not what you are proposing.

In the larger picture, I am always leery of further coerced reliance on nanny-state government institutions. It's not what made this country great.

And what we have is what your beloved free-market has given us.50 million uninsured AmericansMore than 60% of all personal bankruptcies result from excessive medical bills with 3/4 of those coming from people who HAVE health insurance.We pay 20% more per person in this country for health care than the second most expensive country and 50% more than the third and still have one of the highest infant mortality rates and shortest average lifespan among all industrialized nations.If you don't have employer provided health insurance and have any sort of pre-existing medical condition, Medical Insurance is either prohibitively expensive or simply not available at any price.I contend that the free market medical system that you clearly favor is a massive failure. And the profit motive is the reason. The insurance companies have absolutely no incentive to attempt to insure the poor or the ill. So they don't.The insurance companies have every incentive in pursuit of profit to attempt to deny claims and limit doctor's freedom of action and charge utterly ridiculous premiums because their goal is not to provide high quality reasonably priced care, their goal is to make profits.For much of your life, you have not been fully exposed to the and utter failures of the for profit health insurance company since your father was first in the Air Force and then worked for a major corporation that provided reasonable cost medical insurance to their employees and their families.I suspect that in those periods after you left school and left the coverage of your father's coverage, you simply went without health insurance because your employer either didn't offer it or it was tooo expensive. Many young people who are new in the workforce and working for smaller companies that can't afford teh generous benefits of larger companies make the same choice. They (and I suspect you as well) were betting that nothing bad would happen and they wouldn't need much if any medical care.And that works for many of them because they didn't get hurt.But the fact that many people have to make that choice is a very clear example of the failure of the current system.I understand the difference between a for profit model and a government run model very well and I contend that the for profit model is a monumental expensive failure.

I'm not going to contend that the current system is perfect but I'm also not going to stand by and have you distort the facts by saying the introduction of a nanny-state program constitutes the market at work.

You also doubled back on yourself when you pointed out that many of those new to the workforce choose not to have insurance. They represent a massive number of those 50 million without insurance, not those who desperate want it but can't afford it.

I'll take it from you that 60% of bankruptcies are medical cost related but I bet 90% are due to poor spending habits and foolish lifestyle choices... wanna regulate that too?

Yes, I was blessed growing up and I'm not going to apologize to anyone for my dad making something of himself.

"I'm not going to contend that the current system is perfect but I'm also not going to stand by and have you distort the facts by saying the introduction of a nanny-state program constitutes the market at work."What would the world be like if we actually relied on the government to help us?? That would be so horrible. I mean really, having the government be the single payer for health insurance might actually lead to lower costs and longer life expentancies and lower infant mortalities and people getting preventative care instead of having to wait until they are sick and have to go to the emergency room, and less bankruptcies and maybe even a more effecient system.That would be horrible!!!

"You also doubled back on yourself when you pointed out that many of those new to the workforce choose not to have insurance. They represent a massive number of those 50 million without insurance, not those who desperate want it but can't afford it."The studies I have seen put that number who could get health insurance but don't at around 10 million. I don't know that saying that we ONLY have 40 million who are involuntarily uninsured is really any better.

"I'll take it from you that 60% of bankruptcies are medical cost related but I bet 90% are due to poor spending habits and foolish lifestyle choices..."And you belive this because of??? supported by anything other than your belief that people without health insurance haven't made anything of themselves??

3/4 of those medical bankruptcies are filed by people who had health insurance but that insurance was insufficient to cover whatever happened to them but somehow that is because they had bad spending habits or something I guess.

I roughly estimated that 90% (overall) of people who file for bankruptcy do so because of poor financial decisions because by definition bankruptcy is owing more than you can pay. If you haven't noticed there's an epidemic of people living outside their means in our country to the point that even a modest unexpected expense is disastrous.

Don't get on your high horse protecting the dignity of those who can't control themselves with a Visa like they're some sort of oppressed victim group.

What would the world be like if we RELIED on the government to help us? It would be a lot different than it was during the previous generations that made this the greatest nation on the planet at the moment.

I'm not opposed to a reasonable, modest safety net that tries to catch those who fall through the cracks but this is too much, to far and way outside the constitutionally intended purpose of the federal government.

BTW, you never did answer why you are so enamored with Big O's response to that question regarding a gov option driving private insurers out of business. It was a fair question and a sophomoric answer.

Your sarcasm in referencing 'my beloved free market' is a bit disturbing... Are you not of the opinion that a capitalistic market place of products and services is the right one for our nation?

I am a capitalist. There is little doubt that capitalism as an economic system has created more wealth than any other system humanity has tried and that is allows that wealth to be spread broader across society than any other system.But it isn't a perfect system.The current economic crisis is, in many ways, a failure of capitalism. Unrestrained, unregulated capitalism has been proven again and again to be inherently destructive to the vast body of the country.And the health care system in this country is a perfect example of the failures of a profit based system. For profit Health Insurers, by the nature of being a for profit enterprise, have to value profit over the public good. It is in their interest to only insure healthy people. It is in their interest to find creative ways to deny payment for claims or cancel policies that have claims filed against them. It is in their interest to manage the care of their customers in such a way to maximize their profits.That is the nature of a for profit enterprise.One of the benefits of a free market is SUPPOSED TO BE that competition drives down cost and drives up quality as different for profit enterprises compete for their customer's business. But that is not the way the system has worked out.What we have is massively excessive complexity, inefficiency, duplication, conflicts of interest, and a focus on profit instead of a focus on public health.I am a capitalist, but capitalism has its limits.There are somethings that government can do better private industry.I believe that health care is one of them. Both Medicare and the VA systems show that the federal government can effectively and efficiently pay for the whole broad range of health care. And they do it far more efficiently that private industry does.Efficiency is supposed to be one of the benefits of free market competition and in many different markets that is how it works out. But it doesn't work out that way in health care.I am a capitalist who recognizes that captialism and a free market is not a perfect answer. And its my observation that capitalism and the profit motive have not created the lower costs or efficiencies that a free market is supposed to create.

"I roughly estimated that 90% (overall) of people who file for bankruptcy do so because of poor financial decisions because by definition bankruptcy is owing more than you can pay. If you haven't noticed there's an epidemic of people living outside their means in our country to the point that even a modest unexpected expense is disastrous.

Don't get on your high horse protecting the dignity of those who can't control themselves with a Visa like they're some sort of oppressed victim group."

I am not protecting the dignity of those who can't control themselves with a Visa.

In the early 80's only about 8% of all bankruptcies were related to medical bills, now its 62%.

And without any basis for your beliefs other than its what you believe, you choose to believe than 90% of those people screwed themselves up.

I haven't linked to the studies, but I can if you would like.

Other than your own beliefs, what is the basis for your contention that 90% of those people are just irresponsible?

"BTW, you never did answer why you are so enamored with Big O's response to that question regarding a gov option driving private insurers out of business. It was a fair question and a sophomoric answer."

It is a consistent mantra of Republicans and conservatives that government is inherently inefficient.

It is a consistent mantra of Republicans and conservatives that there are very few functions where the government is more efficient than private enterprise.

I have heard that again and again, particuarly since the Reagan Administration.

And that is the essence of the President's response to the question.

If private industry had actually created an efficient and low cost health care delivery system where the large numbers of competing insurance companies kept profits in check, then there wouldn't be such a huge disparity between the overhead costs of private insurance and the publicly run systems.

The US Navy used to have their own shipyards where they both built and maintained warships. Private industry insisted on the right to compete for those contracts such that now the US Navy owns far fewer shipyards and most contstruction and overhauls are done in private shipyards.The Navy Shipyards didn't have to make a profit, they they weren't more efficient than the private shipyards and they lost the contracts to those shipyards.Across the nation there are private companies competing with the government agencies for contracts to run prisons and schools.When I worked for the Department of Energy outside DC, there was a process in place where many of the things being done by DOE employees were being offered out for bid so the DOE employees were having to compete for their jobs with private companies.So your argument that the absense of a profit motive means that a government entity is unfair competition for private industry is not supported by the facts. Government agencies and private enterprise frequently compete for government work and private enterprise frequently wins those competitions.But not in health care.The government has demonstrated that it can efficiently run an health care system.And if private industry cannot compete, they they deserve to lose the business.

So

"Q: Won't that drive private insurers out of business?

THE PRESIDENT: Why would it drive private insurers out of business? If private insurers say that the marketplace provides the best quality healthcare, if they tell us that they're offering a good deal, then why is it that the government -- which they say can't run anything -- suddenly is going to drive them out of business? That's not logical."

We're back at going in circles. My responses to all three comments will be simply be restate parts of what I've already said. If you didn't catch my point the first few times, I'm either not able to explain it sufficiently or you're just misunderstanding/misstating what I'm writing.